2 Smart Lockdown Buys for 150% Dividend Growth, Upside

Brett Owens, Chief Investment Strategist
Updated: May 19, 2020

We’re almost three months into this crisis and three things are crystal clear:

  1. Plenty of “household-name” dividend-payers are in big trouble—and not just the ones you see in the news. When the payout cuts come, the resulting share-price drops will crush the unwary.
  2. Way too many people are clinging to blue chips yielding 2% or 3%. But is such a small payout worth it when you can lose that much in a single trading session?
  3. We can’t trust any stated yield until we verify a company’s cash flow.

This may sound a bit alarmist, but imagine if I told you in January that by mid-May, Ford (F), General Motors (GM), Walt Disney (DIS) and Las Vegas Sands (LVS) would have all either eliminated or, in Disney’s case, delayed their dividends.… Read more

Beat the Next Crash. Grab 7%+ Dividends. Here’s How.

Michael Foster, Investment Strategist
Updated: May 18, 2020

Has this market gone too far, too fast? Is another crash coming? And what the heck should we be buying now?

I’ll dive into all three questions today, and I think my answer to that last one will intrigue you: it’s a tech-focused closed-end fund (CEF) paying a growing 7% dividend! This under-the-radar fund also employs an unusual strategy that hedges its downside if we do get another pullback.

The One Number to Watch Now

Let’s start with where I see the market headed from here.

At its worst point in this latest crash, the S&P 500 lost about 30% of its value, and it did so in less than a month, only to begin recovering a few weeks later.… Read more

2 Contrarian Signals to Grab 7%+ Dividends in This Crisis

Brett Owens, Chief Investment Strategist
Updated: May 15, 2020

If you’re making buy decisions based on the daily gyrations of the S&P 500, you’re setting yourself up for big losses—and costing yourself a shot at big dividends, too.

Why? For starters, at a 2% average yield, the popular names simply don’t pay enough. You’d need to save $2 million just to generate $40,000 in yearly dividends. And let’s be honest: if you have that much cash, you may as well just live on your $2 mil—and forget about dividends entirely!

The rest of us need a better option—one that lets us save a reasonable amount of money (I’m talking $500,000 to $600,000 here) and still generate meaningful income.… Read more

These 500 Funds (Yielding 7%+) Are Perfect Rebound Buys

Michael Foster, Investment Strategist
Updated: May 14, 2020

Don’t listen to the permabears: they’re wrong when they tell you that the massive borrowing America is undertaking to fend off the coronavirus will cripple the economy for years to come.

You’ve no doubt heard this argument—it’s an old trope the talking heads roll out to scare investors into selling their stocks and stuffing cash in their mattresses. Imagine being frightened into selling in late March. You would have sold right at the bottom of this:

Giving in to Media Hype Here …

And if you were still sitting in cash today, grinding your teeth and wondering when you should get back in, you’d have already missed this:

… Locks in a Big Loss Here

And this doesn’t include missed dividend payments—payments you’ll continue to miss the longer you sit on the sidelines!… Read more

These Bonds Shouldn’t Be Available for “Individual Resale”

Brett Owens, Chief Investment Strategist
Updated: May 13, 2020

“Not for individual resale.”

Ever see that label on a box of food, and scratch your head? Like who’s buying this big-mega bag of Chips Ahoy for the purpose of reselling the “individually packaged” helpings of cookies inside?

While you and I have better things to do than deconstruct groceries, we also have better ways to make money than deconstructing perfectly good bond funds.

My article about “preferred” shares a couple of weeks ago inspired a few questions. We’ve got a few adventurous income colleagues who are interested in unwrapping the perfectly good packaging we discussed. Let’s walk them back from this potential “Chips Ahoy moment” in a moment.… Read more

Disney’s “Hidden” Dividend Cut Will Cost You (Even if You Don’t Own It)

Michael Foster, Investment Strategist
Updated: May 11, 2020

The dividend-cut parade is starting on Wall Street, and we need to be on the lookout for “payout traps” that could be hiding in our portfolios (often in plain sight).

That task is made tougher because some companies are using unconventional approaches to cutting their payouts. Take the Walt Disney Company (DIS), which released first-quarter earnings last week. Included: news that Disney wouldn’t pay out dividends for the first half of 2020.

Disney’s Dividend Growth Stalls

After decades of growing its payouts (that dip you see in 2012 above is when the company went from annual to semi-annual payments—annualized payouts actually went up 19% that year), Disney isn’t outright announcing its dividend cut; it’s simply telling investors they may have to wait to get cash in their hands.… Read more

4 Once-in-a-Decade Dividends? They Pay 9.9% to 13.9%

Brett Owens, Chief Investment Strategist
Updated: May 8, 2020

Bear markets can be painful, but they also create “once-in-a-decade” buying opportunities for dividend investors. For example, there are four big names yielding between 9.9% and 13.9% that are literally the leaders in their respective industries. (We’ll review them shortly.)

Bull markets simply don’t boast yields anywhere this high. And double-digit yields can drastically change a retirement game plan.

I’ve complained for years that, if you had a million bucks to plunk down on blue chips and bonds, you’d only be able to wring out about $20,000 to $30,000 in dividends and interest each year. But right now, you can take a nest egg half that size, and generate anywhere between $49,500 to $69,500 annually in dividend cash.… Read more

Bond Armageddon? Not for This Bargain 5.2%-Paying CEF

Michael Foster, Investment Strategist
Updated: May 7, 2020

Subscribers to my CEF Insider service are asking me a lot about corporate bonds these days, so today we’re going to take a close look at it—and what it means for bond funds.

First, let’s talk about interest rates, which are plunging.

Debt Getting Cheaper 

This means companies pay a lower rate than ever when they issue bonds. When rates fall, it can make sense to take on more debt, because you can use that debt to raise cash. If you don’t need that cash, you can pay off the debt later at a low cost because, again, rates are so low.… Read more

The Dividend “Deal of the Decade” Can Quadruple Your Cash

Brett Owens, Chief Investment Strategist
Updated: May 6, 2020

Mainstream financial channels have made a big deal out of the current relief rally (“Is it a ‘V-shaped’ recovery?” they comically muse). Whether it’s a V, W,  L, Nike swoosh or (my favorite) bathtub, the fact is that most stocks are still down on the mat.

(This is no surprise. The average bear market lasts 12 to 18 months. We are just beginning month three—yikes.)

The well-known S&P 500 always leads the headlines. Five hundred of America’s blue-chip firms, sounds like a pretty good sample size, no?

In 2020… no. The index is weighted by market cap, giving favor to Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN)—its top three holdings—which have outperformed the market by a wide margin recently.… Read more

This 4-Stock “Crisis Portfolio” Pays Up to 10.4% (with upside)

Brett Owens, Chief Investment Strategist
Updated: May 5, 2020

The S&P 500 index has been “relief rallying” like crazy, but to most income investors, this means nothing. The wider the basket of stocks, the rougher the year it has been. Let’s consider that (as I’m writing this):

  • Year to date, the “big cap focused” S&P 500 is down “just” 12%. However,
  • When we weight its 500 stocks equally, its return drops to 20% YTD. And,
  • When we expand the universe to look at small cap stocks, we see the Russell 2000 is down a brutal 24% thus far in 2020:

Don’t Let the S&P 500 Fool You

Plus, we now face another problem: an income drought!… Read more